Zam­bia’s an­nual en­ergy gen­er­a­tion ex­pands 11.4% - NKC Africa Eco­nom­ics....

Zambian Business Times - - FRONT PAGE -

En­ergy gen­er­a­tion in Africa’s sec­ond largest cop­per pro­ducer, Zam­bia ex­panded 11.4% year on year in Q1 of 2018 ac­cord­ing to a half year re­port on Zam­bia is­sued by NKC African Eco­nom­ics. This was on ac­count of im­proved rain­fall that saw most wa­ter bod­ies that sup­port hy­dro­elec­tric power gen­er­a­tion such as the Kariba. The elec­tric­ity and gas sec­tor ex­panded by 11.4% y-o-y in 2018 Q1, com­pared to 22.6% y-o-y in 2017 Q4 and 25.6% y- o-y one year ear­lier. En­ergy gen­er­a­tion im­proved sub­stan­tially dur­ing H1:2017. The Kariba dam is now 86% (486.9me­tres) full ac­cord­ing to the Zam­bezi River Author­ity com­pared to a level of 56% (483.17m) one year ear­lier

• The elec­tric­ity and gas sec­tor ex­panded by 11.4% y-o-y in 2018 Q1, com­pared to 22.6% y-o-y in 2017 Q4

• Kariba dam is now 86% full ac­cord­ing to the Zam­bezi River Author­ity com­pared to 56% a year ear­lier

En­ergy gen­er­a­tion in Africa’s sec­ond largest cop­per pro­ducer, Zam­bia ex­panded 11.4% year on year in Q1 of 2018 ac­cord­ing to a half year re­port on Zam­bia is­sued by NKC African Eco­nom­ics. This was on ac­count of im­proved rain­fall that saw most wa­ter bod­ies that sup­port hy­dro­elec­tric power gen­er­a­tion such as the Kariba. The elec­tric­ity and gas sec­tor ex­panded by 11.4% y-o-y in 2018 Q1, com­pared to 22.6% y-o-y in 2017 Q4 and 25.6% y- o-y one year ear­lier. En­ergy gen­er­a­tion im­proved sub­stan­tially dur­ing H1:2017. The Kariba dam is now 86% (486.9me­tres) full ac­cord­ing to the Zam­bezi River Author­ity com­pared to a level of 56% (483.17m) one year ear­lier and a mea­gre 29% two years ago. Dur­ing Zam­bia’s en­ergy poverty era 2015-2016 pe­riod, power gen­er­a­tion de­clined by 16.1% y-o-y to 11.6 mil­lion megawatt hours (MWh) in 2016. This was par­tially due to power ra­tioning also dubbed as load man­age­ment by the power util­ity ZESCO in a bid to con­serve wa­ter as a precautionary mea­sure to mit­i­gate de­clin­ing dam lev­els. Power gen­er­a­tion from ma­jor hy­dro sources de­clined by 15.7% to 10.7 mil­lion MWh while im­ports of power surged by more than 100% to 2.2 mil­lion MWh. The power deficit was es­ti­mated to ex­ceed 1,000 MW at the height of the cri­sis in 2016. How­ever, Zam­bia’s cur­rent gen­er­a­tion ca­pac­ity ex­ceeds 2,200Mwh ab­sorb­ing peak de­mand. Weak power in­fras­truc­ture and a surge in com­mer­cial power de­mand have re­sulted in in­ad­e­quate and er­ratic power sup­ply in re­cent years. As a re­sult, busi­ness sec­tor ac­tiv­ity con­tended with se­vere power out­ages over 2015 to early 2017 as dam lev­els de­clined rapidly, ne­ces­si­tat­ing the emer­gency im­por­ta­tion of fuel at high cost to fis­cal au­thor­i­ties.

In line with fis­cal tar­gets, en­ergy sub­sidy re­form is on­go­ing and will re­sult in fur­ther cost ad­just­ments in 2018 H2. Power tar­iffs were re­vised higher by a cu­mu­la­tive 75% in 2017 in a move to­wards a more cost-re­flec­tive cost struc­ture aimed at lur­ing for­eign in­vest­ment into the sec­tor. Zam­bia has ac­cess to a third of south­ern Africa’s wa­ter re­sources, so its en­ergy gen­er­a­tion po­ten­tial is enor­mous. Un­tapped gen­er­a­tion po­ten­tial is es­ti­mated at 6,000 MW, while in­stalled ca­pac­ity is es­ti­mated only at one-third of po­ten­tial, or 2,200 MW. Hy­dro power ac­counts for more than 95% of in­stalled power gen­er­a­tion ca­pac­ity. The en­ergy sec­tor is reg­u­lated by the En­ergy Reg­u­la­tion Board (ERB) while reg­u­lated util­i­ties in­clude the state-owned ZESCO and the Cop­per­belt En­ergy Cor­po­ra­tion (CEC). The min­ing sec­tor ac­counts for more than 57% of power con­sump­tion, fol­lowed by the ser­vices sec­tor (around one-third of over­all con­sump­tion), fi­nance & prop­erty, man­u­fac­tur­ing, agri­cul­ture and trade. Zam­bia will in align­ment with other SADC mem­ber states im­ple­ment cost re­flec­tive tar­iffs by year end this year. The power util­ity cur­rently un­der­went a cost of ser­vice study whose find­ings are ex­pected to be shared in H2:2018 with the aim of im­prov­ing op­er­a­tional ef­fi­ciency of the power util­ity which has for a long time in­curred losses. Zam­bia in­creased tar­iffs by 75% in a 2 phased ap­proach 25% (March) and 50% (Septem­ber) as a first step.

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